An Introduction to CTI PFAN
and its Services for CTCN &
National Designated Entities
CTCN - Asia Regional Networking Meeting
for National Designated Entities
Peter Storey & Nagaraja Rao
Bangkok, 29th April 2015
Agenda
 Session Objectives (2 mins)
 Video Introduction (3 m)
 Introduction to CTI PFAN and its Services (10 mins)
 CTI PFAN Services for CTCN / NDEs (10 mins)
 Criteria for Project Identifcation & Selection (10 mins)
 Q & A (15 mins)
 Interactive Exercise (30 mins)
 Summary & Benefits of Working with CTI PFAN (5 mins)
 Closing Video (5 mins)
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Session Objectives
 Introduce CTI PFAN & Its Services for CTCN / NDEs
 Help NDE’s recognize, identify and evaluate technology deployment
projects which have the potential to raise private sector investment
and which may be suitable for response requests
 Help NDEs recognize the potential and importance of Private Sector
for Financing & Project Implementation
 Help NDEs access CTI PFAN Services and support in their
countries
 Help NDEs fulfil their mandate / role
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Introduction to CTI PFAN
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The video is accessible at the following link:
http://cti-pfan.net/resource-document/cti-pfan-general-introduction-video
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Track Record
 296 Projects in the Development Pipeline
 USD 6,9 billion of Investment
 12,8 million tonnes pa CO2 e GHG reduction potential
 3,7 GW of clean capacity
 59 Projects Closed / USD 653 million raised
 516,3 MW of Installed Clean Capacity
 2,3 million tonnes CO2 e reduction pa
 109,4 GWh pa Energy Savings (EE projects)
 17 Financing Fora
 810 projects identified / 245 selected / 145 showcased
 38 Projects Closed / USD 336,2 million raised
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Pipeline Analysis at
31.03.2015
CISCA
1%
SE Asia
30%
East Africa
17%
By Region
China
7%
Southern
Africa
12%
Asia
Pacific
0%
S Asia
14%
CAC
7%
LA / Brasil
3%
Wind
5%
West Africa
8%
Solar - 21%
Geothermal
2%
EE - 7%
Hydro
15%
Other
5%
Biofuels
8%
Clean
Transport
3%
W2E
4%
By Technology
Biogas - 10%
Biomass
18%
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CTI PFAN – Rationale
How a multi-pronged approach can scale up clean energy deployment
Coaching &
mentoring
The Missing Middle:
Lack of Access to Financing
Seeking financing
“PUSH”
Clean Energy
Businesses &
Projects
Seeking projects /
businesses
Investment Sources
(Financiers, Banks)
¥€$
“PUSH”
“PUSH”
Government
(policies)
Policy Dialogue
(barriers and
solutions)
Training Financial
Institutions
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CTI PFAN Services
• Deal Facilitation
• Technical Studies
• Due Diligence & Legal
Costs
• Co-Funding required
•
•
•
•
Investor Fora /
Investor Roadshows
1-1 Introductions
Investor Network
Tipping
Point
Technical
Assistance
Investment
Readiness
Assessment
(IRA)
Financing
Facilitation
Targeted
Coaching /
Mentorship
• Identifies Strengths &
Weaknesses for focus of
Coaching
• Feedback from Investors
& Experts
•
•
•
•
Professional Advice
Proven Methodology
Network Members
Local / Global
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Project Criteria
 USD 1 – 50 million
Total Investment
Commercially
Viable
Technically
Viable
Growth
Potential
PFAN
Projects
Competent
Management
Reduce
GHG
Emissions
Team
Development
Benefits
 Micro Projects
(< USD 1 million)
 Wind / Solar / W2E
Biogas / Hydro / EE /
Biomass / Biofuels /
Geothermal / Rural
Electrification / Clean
Transport / Mitigation /
Adaptation
 Technology Neutral
(MDGs)
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Adaptation Related Projects
 Target Sectors
 Access to Energy
 Agriculture & Agri-business
 Water & Sanitation
 Tourism
 Forestry & Eco-System Services
 Urban Development
 Adaptation Products & Services
 Micro-Finance & Micro-Insurance
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Global Snap Shot of CTI PFAN
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Network Analysis
Investor
26%
Consultant
46%
By Member Type
Resource Partner
22%
Funding Partner
6%
South Asia
13%
Latin America
4%
SE Asia
33%
CAC
4%
By Geography
East Africa
11%
Global / Int
13%
CISCA
4%
West Africa
7%
Southern Africa
11%
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Funding Partners
Administration
Secretariat
Head of Secretariat
Executive Committee
CTI Manager
Governance
Non Cash Resources
& Policy Alignment
Global Coordinator
Resource Partners
Regional Coordinators
CTI PFAN
Asia
CTI PFAN
CISCA
CTI PFAN
Southern
Africa
CTI PFAN
East Africa
CTI PFAN
West Africa
CTI PFAN
LAC
CTI PFAN
Central
America
Dedicated Country Networks / Country Coordinators
Private Sector Network Members – Consultants &
Investors
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CTI PFAN’S NETWORK MEMBERS
TCF Limited
FE CLEAN ENERGY GROUP INC.
IG-2SD
CARIBBEAN ESCo LTD.
2
CTI PFAN’S RESOURCE PARTNERS
3
CTI PFAN’s Services for
CTCN / NDEs
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Initial Observations
 CTI PFAN was set up in anticipation of the Technology Mechanism
(CTCN)
 Designed to provide services to CTCN
 Ambition of CTCN that a portion of the TA provided to response
requests is for technology deployment projects which lead to
implementation financed (partly) by the private sector
 Leads to real mitigation and adaptation impacts
 Many valid technology deployment projects are out there
 CTI PFAN can help NDE’s identify and evaluate them
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Broader CTI PFAN Role
NDEs
(TNAs / NAMAs / NAPs / TAPs / PS)
• Commercial Projects & Businesses
• Good Returns
• Well defined & self-contained
Cash Flows
CTC
• Policy Initiatives & Projects
• Low Returns
• Social & Developmental Benefits
• Little identifiable Cash Flow
CTI PFAN
Filter
Process
PRIVATE
SECTOR
PUBLIC
SECTOR
PPPs
Project Development driven
by Private Sector Champion
Financing with Private
Sector Capital
Project Development driven
by Public Sector Champion
Financing with Public
Sector / Donor Resources
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CTI PFAN Assistance to NDEs
Outreach
Preparation of Application to Project Incubator
Project Identification & Evaluation
Framing of Request to CTC for consideration of support
Provision of TA mandated under CTC for Project Development &
Financing Facilitation
[Project Development Workshop / Investor Forum]
Interface with Local Private Sector / Building Local Capacity
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Criteria for Project
Identification & Selection
Identifying Projects which may be suitable for Response
Requests for receipt of CTI PFAN Support & Advice
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Investor Expectations & Concerns
Banks and Financial
Institutions









Execution Capability
Enterprise’s Net Worth / Assets
Collateral Security
Repayment Ability
Liquidity
Industry sector
Application of Funds
Transparency and Compliance
Risk Sharing: Banks & FIs only
interested in assuming financial
and limited commercial risks
Equity Investor
 Returns
 Exit
 Robustness & Scalability of
Business Model
 Execution Capability
 Risk Identification and
Mitigation
 Fair Valuation
 Application of Funds
 Investment horizon
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CTI PFAN Mentoring Experience
 No Ask
 Too Much Technology
 Poorly defined Revenue Model. Insufficiently robust Business Model
 Lack of Financials / Financial Model. Financial Model doesn’t
correspond to assumptions Products/Services and Margin
 Business Plan is largely a work of fiction based on unfounded
optimism, dreams and visions
 BP is not expressed in investors language
 Developers have limited financial understanding / experience / acumen
 Data overload
 Poorly presented and structured information
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Value Proposition &
Business Model
 Overview of capital expenditures, revenues and cost structure
 Explanation of assumptions
 Proposed financing structure
 Financial projections and sensitivity analysis
 Defined exit opportunities for investors
 Do the financials mirror the verbal projections of the plan?
 Funding requirements, potential sources of funds and attractiveness of
such an investment to those funds
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Market Potential
 Identification of core customers
 Identification of competitors and potential substitutes
 Analysis and knowledge of the market size, trends, barriers and
prospects
 Competitive strategy, strengths and weaknesses
 Barriers to Entry (to prevent new competitors entering market)
 Potential for disruptive technologies or competitors to enter market and
displace the project / company
 Unique Selling Points
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Risk Mitigation &
Identification
 Are the principal risks identified and appropriate mitigation strategies
formulated?
 Commercial / Market Risks
 Financial Risks
 Interest Rates / Exchange Rates
 Regulatory Risk
 Logistics / Security of Feedstock Supply
 Counterparty Risks
 Off-takers / Suppliers /
 Performance Risks
 Technology Risks
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Management Team
 Experience and track record of the team
 Is the team capable of delivering the project
 Are solutions provided for potential management gaps
 Execution depends on the Management Team. Investors look for
teams which have credibility to deliver the project
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Operations &
Implementation Plan
 Analysis of key implementation milestones and approach
 Analysis of the activities necessary to transform the inputs / activities
into the final project / product / service
 Inbound & Outbound Logistics
 Feedstock Supply
 Delivery of Product to Market
 Technical & Practical Challenges




Power Evacuation & Transmission / Load Balancing
Grid Stability
Affordability & Ability to pay
Banking & Money Handling
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Other Areas
 Project Maturity
 How soon can project be implemented?
 Environmental, Social and Development Benefits
 SDGs
 Professionalism & Presentation of Proposal
 Balance
 Attractiveness to Investor
 Returns
 Ability to Scale
 Exit
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Interactive Exercise
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Project Evaluation
Exercise
 Case Study – based on real live current project
 Short Verbal Introduction of Project & Executive Summary Hand Out
 4 Groups
 Each Group discusses and analyses the project’s strengths and
weaknesses in relation to 2 key evaluation criteria – 10 minutes
 Based on the analysis each Group makes recommendations for areas
of work under a potential CTCN response request
 1 Rapporteur per Group presents the findings of each Group
 2 minutes per Rapporteur / Group
 Short discussion & feedback in each case (2 minutes)
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Group Questions
 What are Strengths & Weaknesses (Risks)?
 As a result of your analysis what areas could be suitable for
CTCN response request?
Group 1
Value Proposition
Revenue & Business Model
Group 2
Techno-Economic Feasibility
Operational Logistics
Group 3
Market
Competition
Group 4
Development, Environmental & Social
Impact
Ability to Scale / Maturity
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5 Star Stoves - Bangladesh
 Business Model
 Biomass Gasification Cooking Solution - $80 per stove (2 plate, power pack
& solar panel for mobile recharge)
 Pre-paid model: pellet supply and distribution
 Market
 Urban and Semi-Urban areas - 21,000 stoves
 By 5 years - 61,000 stoves
 Developers
 Willem Malherbe / SMM Kamal
 Investment
 Total Project Cost $7,2 mm: Investor Equity $5 mm and Developer Equity
$2,2 mm
 Application of Funds: manufacturing plant, logistics, R&D, distribution
channel
 Indicative Return: IRR - 17.5%
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Summary & Conclusions
Benefits & Added Value of Working with CTI PFAN
on Response Requests
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Benefits & Added Value
 CTI PFAN knows Technology Deployment Projects
 Mobilisation of Private Sector
 Direct linkages & working relationships at regional & country levels
 Resource Optimisation
 Building of Local Capacity & Markets




Project Developers / SME Sector
Local Consultants
Local Institutions
NDE
 Real Mitigation & Adaptation Impacts
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Case Study: Waste to Energy
The video is accessible at the following link:
https://vimeo.com/103260077
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Contacts
 Peter Storey, Global Co-ordinator ([email protected])
 Nagaraja Rao, Dawn Consulting ([email protected])
www.cti-pfan.net
www.climatetech.net
Thank You
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